Why Don't Journalists Get Residuals?

Even those who have only been following the Hollywood writers' strike from a disinterested distance are probably aware that the whole kerfuffle boils down to one thing: residuals. The premise behind residuals is simple enough. Writers create stories and turn them over to companies who use them to make money. When those companies reuse that creative content to make more money -- think reruns, international sales, home video and such--the writers get cut in on that new revenue. The equation is so obvious and fair-minded that no one, not even the producers, is arguing that there shouldn't be residuals. The fight is over just how much money should be shared.

Which leads me to wonder: Why don't journalists get residuals?

As a writer who's worked both in Hollywood and journalism, it's clear to me that the arguments used to justify residuals in one field could certainly apply in the other. Newspaper and magazine reporters produce stories and the companies that employ them profit from those creative efforts. And just as in Hollywood, those media conglomerates are always on the lookout for ways to (pardon my corporate speak) repurpose their material. Journalism doesn't have as many natural recycling opportunities -- news stories don't really lend themselves to reruns -- but it does happen.

At Sports Illustrated, popular features are often anthologized in hardcover editions with names like SI's Great Baseball Writing. Writers for The New York Times frequently see their articles picked up by other papers around the country. When I was a writer for Entertainment Weekly, my pieces would routinely get republished by other magazines in the Time Inc. empire -- usually international editions like Who Weekly in Australia or Time Asia. And of course all of these outlets post stories from their print edition on the web, which as we've all been told is the shining new frontier when it comes to advertising bucks.

None of that extra revenue trickles back to the writers. So why is it that a system that's considered part of the natural order in Hollywood is so utterly alien in journalism?

Well for one thing, journalism companies have a legal basis for depriving their writers of residuals -- the "work for hire" principle. Unlike Hollywood writers who are essentially independent contractors, most journalists are salaried employees, with regular paychecks and health benefits and pension plans. As such, the fruits of their labor become the property of their employers. That's the trade-off. Just as an engineer for Intel waives any financial claim to breakthroughs in chip design he makes while on the corporate clock, newspaper and magazine writers forswear any ownership stake in their stories.

But even though work-for-hire is legal -- outlined by the Copyright Act of 1976 -- that doesn't necessarily mean it's fair. In recent days, spurred on by the WGA strike, everyone from labor relations experts to software engineers have begun debating its merits and failings. And keep in mind, in the old days screenwriters were full-time employees of the studios and had no ownership stake in their works. It was only after the scribes unionized and fought back did they win royalty rights.

Most pointedly, work-for-hire doesn't explain why freelance journalists don't get residuals. Their situation is the one that's the most analogous to writers in Hollywood, yet when a freelancer's work is reused online, or reprinted in an international edition, or syndicated, he or she typically doesn't get a single extra cent. Back in the '90s, a group of freelancers sued The New York Times and several other publishing giants over this very point. Hollywood's residual system was cited often in that case, and in 2001 the Supreme Court ruled 7-2 in favor of the writers.

The problem is, in reality nothing changed. Publishers simply altered their standard freelance contracts so that writers were forced to sign over all rights to their stories to the companies. Theoretically a freelancer could insist on changing the contract or refuse the assignment, but 95% of the writers out there don't have the muscle for that kind of power play.

In the end, the residual question is purely a labor issue. Journalists could band together and fight for the authorship rights to their work, but they are by nature notoriously difficult to organize. And the major corporations have done an effective job of dissuading the occasional large-scale unionizing attempt. (The Newspaper Guild still doesn't cover writers at most magazines.) That's why, as Barbara Ehrenreich points out, the per-word payment for freelance articles hasn't changed in 30 years. That's also why Jonathan Tasini, the lead plaintiff in that Supreme Court case, calls the business plan of today's media companies a "plantation-like economic model."

Most importantly, the current system has already concretized into an unshakeable industry standard. It would take a shake-up in the way media companies do business to change the established order. Some kind of shift that resets all the existing revenue streams and pay-outs. A revolution, if you will...

Perhaps even a digital one.

Read more about the strike on the Huffington Post's writers' strike page.